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Car Rentals Are Affected by High Gas Prices, Especially In California

Legacy Car Rental sees high gas prices in CA at a local Chevron Gas Station
One reason gas prices are surging in California is that West Coast refineries are Russia’s best U.S. customers.(Gary Coronado / Los Angeles Times)

The Rise in California Gas Prices – March 2022

The rising gas prices in California shock car rental companies and drivers. Motorists have to get their fuel for as high as $6 a gallon in Los Angeles and a few districts in California. They suffer from the increase in gasoline costs despite the fading prices in some states in the country. Looking at the price range of gasoline from $5 to $6 per gallon on average, California gas prices continue to surprise car drivers and car rental companies (Domm, 2022). In this uncompromising surge in gas prices in California, corporate leaders of car rental companies, drivers, and regular customers decide on making further adjustments to endure this price brawl and face the challenge in the market.

Increased Gas Prices in California

The demanding gasoline prices in California transpire due to the state’s interference in the gas supply chain and the Ukrainian-Russian war. Economic experts reason out that the higher prices of petrol are due to California’s emission regulations and higher gasoline taxes, as well as its Golden State’s position as the “fuel island” (Budryk, 2022). Aside from that, the war in Ukraine adds to the market drama letting gas prices spike at three cents a gallon to an average of $5.72 (Isidore, 2022). Experts predict that the aftermath of the Russian-Ukrainian war will set national and global records in the market. In the coming weeks and months, gas prices will stay the same or will grow by two cents from $4.31 a gallon to $4.33 (Lin, 2022; Isidore, 2022). Though the increase in gas prices in California is nearly a dollar, such figures will change depending on the market volatility.

Impact of High Gas Prices on Regular Consumers

Motorists ask to lower the gasoline prices in California. Knowing that other cities and states in the country begin to lower their gas prices, California car drivers try to question the same prices of gasoline. Some motorists have to make some changes as a result of the present Ukrainian-Russian conflict. Commuters have to cut their trips and other travels due to high gasoline prices. Holidaymakers choose to reduce their family retreats to save money on gasoline. Company leaders in small-scale enterprises make further adjustments on their monthly meetings by rescheduling their meetings quarterly. Instead of conducting meetings in person, company leaders choose to use communication technologies such as Zoom to inform their business associates and employees.

Impact of High Gas Prices on Car Rental Companies

Aside from regular car drivers, car rental companies tend to suffer from the financial crisis. The price jump compels drivers to choose not to rent cars from car rental companies due to the crude oil and natural gas prices (Jana & Ghosh, 2022). Some people, who have regular family get-together trips, decide to limit their travels monthly. Business frontrunners, who have scheduled meetings, have to shorten their trips. As the present prices of gas continue to climb, corporate managers of Car Rental Companies have to find the right solution to the problem. All business managers of all companies, for example, can make further adjust to their firms’ operations. Also, car drivers can change their driving habits one way or another to reduce their gas consumption. To survive in the demanding market, business owners of car rental companies can integrate active measures to stay in the market.

Moreover, all business proprietors in the car rental companies can observe this challenge in the market. They decide to make some adjustments in their business operations and struggle to find clients to survive. They now understand the diminishing number of people who rent cars because of high gas prices, and they continue to strive to face the challenge while facing the market. The new challenges demand assistance from government leaders and gas company owners to keep the prices at the minimum to help car rental companies and drivers to break even in the market. As California gas prices are high, they need to keep gas prices down by cents or by a dollar. In this way, car rental company owners can alleviate the escalating prices of gas and other products.

Persistent Increase in Gas Prices

The increase in gas prices in California remains a challenge to small businesses. The report of Chris Isidore (2022) reveals how drivers see the possibility of paying $6 a gallon for gas. Paying $6 a gallon of gas is public panic in Los Angeles County. With 10 million residents, car drivers now pay an average price of $6 a gallon for gas. Considering California as the most densely populated city in the country, competition in gas consumption continues (Karlamangla, 2022). Even if gas prices fall slowly, California markets continue to make headlines and records. The American Automobile Association (AAA) adheres to the national average of $4.23 per gallon of unleaded, which is about 10 cents per gallon below first-hand records. However, car drivers who are particular with the market activities can even watch those gas prices rise and fall. Looking at the actual impact of Russia’s attack on Ukraine, gas prices continue to change due to the high volatility of oil in the world market.

Other Causes of Amplified Gas Prices

Two essential impulses for gas price incongruities in California and other states are the strategic locations and huge taxes. With seven major wholesale gasoline markets, in the United States These markets are responsible for the change in gas prices. Two of them are strategic sites in California and one in the Pacific Northwest. Aside from that, four of the gasoline markets are across the rest of the country. In other words, living west of the Rocky Mountains in the country sees soaring petrol prices due to high gas taxes and the costs of regulatory programs to reduce greenhouse gas emissions (Karlamangla, 2022). Despite the waning gas prices in other cities and states in the United States, the gas prices of the State of California continue to spike.

Indeed, the sustained increase in gas prices in California despite the waning prices in some cities and states in the country can surprise car drivers and car rental company owners. The persistent high prices of gas can intrude the market flow and the gasoline supply chain. Aside from that, car rental companies can see potential losses in their business operations and sales performances. Moreover, average people and holidaymakers, who keep on traveling, can create new schedules for their trips by reducing shortening days and weeks when gas prices are steady. In the end, car rental companies must guarantee effective business strategies for them to stay in the game.

At Legacy Car Rental in Los Angeles
At Legacy, we understand that extra cost of gasoline can affect each driver’s overall experience driving around the city of Los Angeles. Therefore, we have implemented a new marketing strategy to increase our volume of bookings and lowered our margins to keep our prices relatively the same as before when gas prices averaged at $4.50 a gallon. It is our pleasure to provide the great service we have always provided at the usual great value. Our competitive rates help us offer cars for rent to Los Angeles, Santa Monica, Beverly Hills and other Greater Los Angeles Area’s residence and visitors. High-end luxury cars and exotics are our niche, we are proud of our showroom-condition fleet of automobiles. Whether you are in Los Angeles for a few days or you are permanent resident, you can rent a car from us at best short or long-term rates. Contact us today!

Budryk, Z. (17 March 2022). Why California has the highest gas prices in the nation. Retrieved from https://thehill.com/policy/energy-environment/598655-taxes-mystery-surcharge-intensify-californians-pain-at-the-pump/
Domm, P. (24 March 2022). Gasoline prices are hitting $6 in some parts of the country and summer driving season isn’t here yet. Retrieved from https://www.cnbc.com/2022/03/24/gasoline-prices-hit-6-in-parts-of-the-us-and-summer-driving-isnt-here-yet.html

Isidore, C. (24 March 2022). Here’s why gas is $6 a gallon in California, even as prices fall elsewhere. Retrieved from https://edition.cnn.com/2022/03/23/business/california-gas-prices-6-dollars/index.html

Jana, R. K., & Ghosh, I. (2022). A residual driven ensemble machine learning approach for forecasting natural gas prices: analyses for pre-and during-COVID-19 phases. Annals of Operations Research, 1-22.
Karlamangla, S. (24 March 2022). U.S. gas prices are coming back down, but not in California. Retrieved from https://www.nytimes.com/2022/03/24/us/california-gas-prices.html
Lin, S. (11 March 2022). California gas prices continue to swell, but experts say relief could be in sight. Retrieved from https://www.mercurynews.com/2022/03/11/california-gas-prices-continue-to-swell-rising-three-cents-since-yesterday-but-experts-say-relief-could-be-in-sight/

 

Certain data, facts and resources are beyond the scope of this article. This article is designed for user interaction and daily update of a small business in Southern California and NOT for scientific research or affiliated activities or academic archive citation or quotation. 

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